Ease of doing business – Recent changes in company incorporation procedures

Ease of doing business – Recent changes in company incorporation procedures

Legal & Compliance

Ravi Kariya

Ravi Kariya

333 week ago — 5 min read

The Ministry of Corporate Affairs (MCA) has brought about a transformational change in the company name reservation and incorporation processes ever since it has undertaken the initiative of Government Process Reengineering (GPR) and setting up the Central Registration Centre (CRC) for processing of company name availability and incorporation aspects. The project to transform the processing of company incorporation e-forms was undertaken with one clear objective — applications for name reservation and incorporation of a company should be processed and completed within 24 hours (one working day), in line with the best global corporate practices. 


Reserve Unique Name (RUN) web service 
Recently, the Ministry of Corporate Affairs took up a bold initiative by introducing the Reserve Unique Name (RUN) web service. Effective from 26th January 2018, it is a simple and easy to use web service for reserving a name for a new company or for change of name of any existing company. Let’s check out the salient features of this newly-introduced service: 


  • It is introduced in the form of an online utility on the MCA portal
  • An approved name is valid for a period of:
    • 20 days from the date of approval (in case the name is being reserved for a new company); or
    • 60 days from the date of approval (in case of change of name of an existing company).
  • A comment section has been introduced, wherein the applicant has to enter the objects of the proposed company and any other relevant comments in support of the proposed name
  • Name applications will be processed by the Central Registration Centre (CRC) under non-STP mode. The name applied for will be subjected to a comprehensive check by the CCRC; and thereafter, approval or rejection — as the case may be — shall be communicated by e-mail to the applicant
  • When a proposed name is approved or rejected, an e-mail containing confirmation of approval or rejection (as the case may be) with related documents, if any, will be sent to the e-mail ID of the applicant
  • This is a post-login service, and existing users would need to log in to their account using their credentials. New users are required to create a login account before using the service on the MCA portal. The same user login ID, which was used for reserving the name, has to be used for submitting and uploading  Simplified Proforma for Incorporating Company electronically (SPICe) or any other incorporation forms.
  • Compared to the earlier procedure of filing INC-1 e-Form, no prior Director Identification Number (DIN) or Digital Signature Certificate (DSC) is required for applying through RUN
  • The name applied for will either be approved or rejected, and no resubmission is allowed. A fresh payment of Rs 1,000 has to be made for every application submitted using the RUN web service
  • Filing fees remain the same, compared to previous procedure, i.e., Rs 1,000; but since there are no chances of resubmission, there remains a probability of frequent name rejections


Incorporation with ‘Zero Fees’
Along with the introduction of RUN services, the Ministry has introduced Companies (Registration Offices and Fees) Amendment Rules, 2018, wherein it has eliminated the fees charged at various stages of incorporation. Although stamp duty is still being levied, this comes as a huge relief as they have implemented the process of speedy, smooth and simple incorporation with zero fees for incorporation of all companies with an authorised capital of up to Rs 10 lakh. 


Other amendments
The Ministry has also reengineered the process of allotment of DIN by allotting it through the combined SPICe form only at the time of an individual’s appointment as director, in case he/ she doesn’t have a DIN. Forms SPICe(INC-32), SPICeMoA(INC-33), SPICeAoA(INC-34), INC-3, INC-12, INC-22, INC-24, DIR-3, DIR-12 and GNL-1 have been revised in order to give effect of the introduction of RUN services in the incorporation procedures.


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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker. 


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Ravi Haresh Kariya

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